tv Bloomberg West Bloomberg May 31, 2016 6:00pm-7:01pm EDT
killing 32 people. has one final appeal to italy's highest court. ofert' or says the return 80,000 residents to fort mcmurray will continue tomorrow as planned. about 2200 structures were planned. schools will not reopen until september. democrats investigating the benghazi terror attack want to review the report before its release. to theter was sent chairman requesting a joint report. republicans and democrats have in at odds since the inception of the two-year-old probe. four americans were killed in the attack. california governor jerry brown is backing hillary clinton for president. the endorsement comes at a critical time. california holds its primary next tuesday. global news 24 hours a day powered by our 2400 journalists
in more than 150 news bureaus around the world. bloomberg newsroom, "bloomberg west" is next. emily: i'm emily chang and this is "bloomberg west." elon musk takes shareholders down memory lane at the annual meeting. we will bring you the details. uber gets a million dollar credit line from wall street. it may help the company grow but how do drivers deal? the white house looks to sponsor entrepreneurship in africa. assistanteak to the secretary of african affairs for more details will -- details.
the tesla shareholder meeting is underway with elon musk treating investors to something different -- a look back at the history of the company, it's beginning, it's motivation and the story of what has happened over the years. : we always try to do the right thing. we care about that. when we make mistakes, it's because we are being foolish or stupid or whatever. always made with the right motivations. walk through tesla's origin story comes a time when tesla is trying to meet an ambitious production schedule for its model three. many analysts have said getting it right is likely to make or break tesla. we are joined by someone who was with tesla from the very beginning. ian wright. he's now developing electric
powered trains for larger vehicles. my guest host for the hour is david kirkpatrick. thank you for joining us. since you have been following the shareholder meeting, what do you make of the latest developments and the act that he's not sharing his vision of the future but instead looking back at the past? had gottenhe time i to come here, he had only gotten to the point where they were developing the roadster. i'm sure most of the interesting things will be in the q&a which at the pace he was going will probably be sometime around 7:00 pacific standard time. emily: the q&a time is always very entertaining for tesla shareholders meetings. he was going back to a time when you are still at this company and everyone wants to know how production is going for the
model three. interesting a very history and if you go all the way back to that, one of the goals was to change the way people look at electric cars. at the time, people that they were golf carts. .hey were heavy, ugly and slow now everyone wants a tesla. we have exceeded beyond everyone's wildest dreams. now they are working on premium, fully electric vehicles. tesla has never had competition in that market. can they stand up to it? think the tesla brand is incredibly strong now. emily: you are one of those who put a thousand dollars down hoping they can meet the production schedule. what do you make of the skepticism? refundable,oney is so i'm optimistic but pragmatic. i'm just curious to ask ian a
company goten this started that you are so intimately involved in, was the idea that electric vehicles would sell so well that it would begin to be self funding more is this the kind of tesla we have seen funded by continuing to sell more shares and operating at a loss for a long time what was anticipated all along? sayt: having it's fair to we were quite naive about what it takes to start and run a car company. emily: how so? guest: the original business thought it would raise 25000 and it to break even. have any teslat shares anymore. as part of the reason you left as you could not die into the decision that buying electric cars could be economic and fully mainstream?
guest: yes. they are wonderful things. they are fantastically fun to drive. everyone i know loves it. but they are not cheap. nobody buys electric car to save money. trucks burn 14,000 gallons a year. city cars burn 200. the economics are compelling for average trucks. are focused on bigger vehicles like garbage trucks, so why is that eschewed mark guest: because the economics are compelling. even though we sell a power train for a garbage truck for a lot of money, they save enough fuel and maintenance unless it is three or four years. it's a compelling economic opposition. therefore it will be widely deployed and make a huge difference in cities where all this fuel consumption happens. do you make of the
thought here that what tesla is trying to do -- is it impossible? david: certainly not impossible but the company is being valued as a disruptor and you are talking about 50,000 units globally out of 100 million. it's one thing to be a niche $100,000 but it's another to become a volume automaker. the amount of that would the from 50,000 for a million is going to be a lot and is going to mean losses and cash burn for a long time. isly: if what tesla attempting to do is not necessarily impossible but maybe improbable or just extremely difficult, where does that leave tesla in the future? i would argue that it's
never smart to bet against elon. emily: it's not something we haven't discussed at length, but quality problems with the car one of our analysts believes are undercovered. i know a lot of people with tesla's and they are all 100% happy with them. i don't have any first-hand reports of any troubles so far. emily: where do you see tesla in five years? guest: it's really hard to say. emily: but you are not betting against elon? guest: no, i'm not. emily: the tesla cofounder -- thank you so much. david kirkpatrick is my cohost for the hour. you are sticking with me. now to a story we watching -- softbank says it will sell $7.9 billion of its share in alibaba
to pay off its debt load. it's the first time they sold any shares in the chinese e-commerce. another half $1 billion would be sold to a major sovereign wealth fund. however, the sale of softbank will remain one of alibaba pass biggest shareholders. those shares are lower in after-hours trading. apple shares -- slid after the nikkei reported the company may extend its iphone up rate schedule to every three years. currently, apple releases a major upgrade every year with a of trade in between. the iphone seven, due to release in september is set to look to nexturrent iphone within
losses and other food ordering site widen for the quarter. key are often seen as a barometer for german startups and is under pressure to prove backing companies are capable of longevity. now to uber -- lost -- wall street extending a billion dollars in credit to uber leasing business. and uber subsidiary called exchange will use the funds to lease cars to drivers rejected by other lenders. the goal is to put 100,000 drivers on the road, but is it safe? piece -- big in-depth my cohost, david kirkpatrick is still with us. they have been building out this program in the united
states and the in-house program has been incorporated. they have been trying different strategies but this is clearly a different sign. emily: you interviewed half a dozen drivers who participated in this program. many of whom were not happy with the results of the program. uber says they are not profiting from this program in any way. talk to us about what drivers told you. guest: there are two camps. a couple of drivers we talked to, they have terrible credit -- one woman i spoke with had medical problems that caused her to get into debt. another said it was hard for her to get into a car. uber and exchange was a pass -- a half to make more money. it was an alternative, but she was paying huge sums to keep the
car going. emily: $12,000 more than the total of the car. guest: they are very expensive. if you are poor in this country and you want to get a lease, it is very expensive. emily: you talk to another driver who got into an accident and would not have been able to get a lease any other way. ultimately, they/rates and he could not keep up the payments, so he just left the car outside with a note to uber saying thanks, no thanks. and someone came to pick it up a few months later. uber has gotten itself into the repo business. there's definitely some serious turnover. and hetes in january felt like he couldn't make the money, so he quit. his car was parked out there with a note tacked on it.
and then someday in the bill of the night, someone came and took it away. emily: we got a statement from the person running this, the head of the exchange leasing program. they issued a statement saying the popularity of uber auto lease is incredible and it provides access to hike wally cars with no restrictions on miles and the ability to rake the lease early with minimal fees. what is your reaction to the details that have been uncovered with this program as a passenger? he did a great job with the story. it is breaking great new ground. the company plays hardball at every turn. prices allting low over the world but it raises the prospect that the driver is going to be someone who doesn't even have good enough credit to buy their own cars or lease it
through conventional means. it sounds like it allows almost anyone to walk in off the street and think they are going to get a job because they will get a car and the requirement to use it to pay back the lease in hopes of making a little more money. but i have had mixed experiences with uber drivers as i'm sure many have and it does not reassure me about my customer experience. says they need to get more drivers on the road and who's to say any of these people shouldn't the driving, but that's a fair point. as some of you has had mixed experiences with uber drivers, you are getting into a car with these people. guest: there's a huge appetite to grow the number of drivers anyway they can. we did not get into it in this story but people with poor credit ratings may be more likely to be bad drivers and some of that is because of how you get a bad credit rating.
there are certainly questions to ask there if uber is encouraging people with poor credit to get on the road. i did not get into it with this story but that is part of it. big theo we know how program is at this point? guest: they have discounts and other finance programs, it is through their cumulative finance effort that i found out about the ilion dollar debt the silty late in the game, so i'm curious to see how that changes their expectations. emily: how subprime is this? guest: no prime is one phrase you might use. they have subprime drivers and technical rating bands and for uber, it's not a matter of whether you default on a car
before but i know they are going to pull money right out of your income. if you are driving for over, they are going to take the money right out of your paycheck. what do you think about the idea of more wall street institutions -- david: i want to ask, he's speaking to drivers recommended to him by uber -- did you say i've got a job and i'm paying off my lease and making tons of money? one of the lead drivers we talked to was from uber. certainly the driver uber recommended was still working for uber. she was happy with the program and if you look at the number, i don't think you would walk away thinking she's made a lot of money.
the job over papa john's, so she's making trade-offs but i don't think you would look at it and think she's making a ton of money. make -- helped her helped her get a car. say this is america and uber is trying to help people get one. emily: thank you so much. up, oracle is back in court, but this time playing defense. we will head to washington dc for details on the company's big legal battle just days after losing a $9 billion case to google. ♪
it drove the collapse of an ap chip. it is a 3 billion dollars claim dating back to the 90's that's likely to drop some of the bad blood that has developed between these two tech giants. joining us from washington for some background is our litigation analyst, matt larson. one of the first point to mention is mark hurd ended up going to work for oracle where he is now co-ceo. what can we expect from this trial? hp is going to be making the case that when it was going to withdraw software support that it caused the business to crater and caused losses. nobody's going to want it because of the status of the software. there are other market indicators and indicators from chip manufacturers that this was
not a profitable endeavor and that they were withdrawing support and had no legal obligation to continue support. you will see those play out over the course of the next several weeks in trial. the chipu covered years ago, what do you think? chaos i covered a lot of of which mark hurd was very involved with before he jumped to oracle. i wonder if it extends to some leverage hp had because of the experience that oracle? did they get oracle to agree some things that may be you are going to come back to bite them here? they are going to dredge up some of that bad blood. you are going to see some of the old discussions. and oracle wasce
presenting this as it's not a binding contract and we agreed to continue as business partners. it's not a specific, binding legal documents. when they resolved some of the trade secret litigation going on, the idea was we continue working together but it doesn't mean we are going to continue pouring money and effort into an unprofitable business. i think you will see a little of this back and forth. on oracle, we did not agree to help you with an unprofitable project. emily: now oracle is entering this fresh off of losing a $9 billion case to google, what is next there? : on the google side, they are going to continue to fight the loss. billion ineeking $9
the slice of the android pie. withs going to continue posttrial appeals and i don't think they are going to give up just because the jury did not find in their favor. things goingot of on in different venues so it will be a profitable time for their lawyers. emily: thank you for the date. david kirkpatrick, you are sticking with me. coming up, a u.s. ambassador with extensive experience in africa joins us to discuss the biggest areas of potential tech disruption. ambassador linda thomas greenfield is next.
or testifying before the trial. many witnesses were elderly and said would not be available when the trial start sometime next year. public depositions would taint the potential pool. scientists say the water in flint michigan is safe for washing and bathing. the water became tainted in 2014. flint resumed using detroit water last october. a puerto rico tourism official has said the zika virus has led to the cancellation of at least 32,000 hotel reservations through 2018, translating to $28 million in lost revenue. puerto rico has been hit harder by zika than any other part of the u.s. donald trump is lashing out at that media for the media trying to pin down trying to find out how much money he raised when to veterans. he said the event raised $5.6 million and it is all being sent
. he said he had not wanted any credit or helping to raise the money. global news 24 hours a day powered by our 2400 journalists in more than 150 news bureaus around the world. from bloomberg world headquarters, i'm, chandra. it's just after 6:30 in new york. it's 8:30 in sydney. i'm joined by paul allen for a look at the markets there. : just the one market opened in the asia-pacific right now and that is new zealand. the index looking pretty flat after the first 30 minutes of trade. expecting a flat start in the k as well. today --cks to watch the bank of china aviation is not what it sounds like. it's going to make its debut in hong kong after raising 1.1 billion for the ipo. japan's softbank will be in
focus after announcing its going to sell almost all of its stake in alibaba. $7.9 billion will be sold. trustlion will go to a for qualified institutional buyers. china, we are expecting manufacturing and nonmanufacturing pmi with slight declines expected there. theost is expected for australian gdp. that's just some of what we are watching today. emily: some of the biggest names in tact will descend on silicon valley next month for the global entrepreneurship summit.
president obama is hosting the event at stanford aimed at fostering exchange across borders. last year's summit was held in kenya, putting a spotlight on tech innovations across africa. african-based startups are expected to hit up ilion dollars. for more, we are joined by linda thomas greenfield joining me in the studio. david kirkpatrick is still with us in new york. it is fascinating. i had not heard the term silicon savanna until today that apparently people are using these terms. how would you describe the tech scene in africa right now? you say they skipped a lot of steps to get to where they are today. guest: i would describe technology in africa as thriving. there is a huge interest in improving access to technology.
africanse areas where really get technology is in telephone technology where they never had land lines in an expansive way on the continent, but the use of cell phones became immediately popular. inica really took the lead banking the a telephone and communication in a way that did not happen in the united states for a number of reasons. one being we already had other technologies. emily: so people have a cell phone and they are connected? guest: you could go into the deepest village in the middle of nowhere on a road and you will with aillage woman working cell phone. emily: what is it about now that makes africa right for tech disruption? in 2014 has six of
the 10 fastest growing economies. there are opportunities on the continent of africa that were not recognized in previous years and companies are beginning to see the possibilities of the opportunities and the resources that are available in africa that they can invest in and they can beese opportunities very profitable. about techalk a lot in china, europe and india, but we almost never talk about technology in africa. why do you think it has been so absent from the narrative? david: i don't think we talk about africa enough in general, but that has been changing in the last couple of years. there is such enthusiasm among young people in cities all over the world but especially big cities in africa like cairo or
lagos, nigeria or johannesburg or nairobi. is --s interesting to me and i'm curious to hear the secretary talk about this -- cairo and lagos were becoming big tech hubs but egypt has a despotic government. nigeria is in a real economic decline. is that a problem that's going to slow down opportunities for these people who are already starting to get back into the as him? from: africa is suffering the same economic downturns we are seeing occur elsewhere in the world. amongere's an enthusiasm african youth from african countries to really connect to technology. i see this as an opportunity and most african leaders see it as an opportunity and that's one of
the reasons the global entrepreneurship summit was hosted in kenya last year. 100 less african countries that will be participating here in silicon valley in june. emily: what other kinds of startups do you see taking off in africa and mark guest: mobile banking is the biggest. women usingt technology to get their products to market. ec huge banking operations that use technology beyond cell phone technology. we see african entrepreneurs who are tech savvy, who are coming they wantw ideas that to bring into the technology scene who are looking for opportunities. emily: the chinese governors and -- chinese government and chinese investors have an
interested in investing for a long time to much greater extent than the united states. in mark that play out guest: i think there are opportunities for all. amazing opportunities for american companies. desired companies are on the continent of africa. have morenge is to companies look at the opportunities that are available and take a chance and invest. emily: linda thomas greenfield, fast waiting to hear about what is going on on the african continent. i appreciate you stopping by and joining us. up, improving silicon valley's diversity problem starting in the boardroom. a new study on what entrepreneurs are looking for from their direct others. -- from their directors.
emily: u.s. internet giants, facebook, twitter, and google have issued a joint code of conduct for fighting social media used by terrorist. the company has said it would content and cut it off if necessary. the move clarifies how the companies will abide by existing rules to tackle extremism and hate speech after attacks in brussels and paris. face one year of jail time if they do not comply. twitter's had a public policy says they remain committed to letting the tweets flow. however, there's a clear distinction between freedom of
expression and conduct that incite violence and hate. periscope has come up with a new tool to fight abuse in its broadcasts. it will lead users report comments they find inappropriate and a small group of viewers will report on whether it is abusive. i asked the ceo to describe plans to address online abuse. guest: a culmination of algorithms and getting the community to work via real-time moderation. what i love is you can be aroundrent with people this person was marked as being abusive and they will not be able to comment any more. emily: that was the ceo of periscope. it's no secret silicon valley is struggling with diversity and a lot of people are working hard to change it. one venture trying to facilitate is focusing on company
boards. they want to be the linkedin a female director candidates and according to a survey commissioned by the board, 40% of ceos have an under tilde independent board seat. what are the biggest challenges to increase diversity? here to discuss that is david kirkpatrick was still with us from new york. a labor of love for you and you have been going together interesting that the would like toat i point out -- 74% of people believe gender diversity makes a board better. only 38% believe it is very important and 38% believe it is not important to add gender diversity to the board. guest: it is interesting because theyook at the data -- yet admit it improves efficacy.
we ask ceos what is important, 68% said adding expertise. when you parse this, what they are trying to tell us is we want to add diversity, but it is about experience. component of trying to fill the experience cap in the boardroom. been gettings it ceos to adopt? has it been more difficult? to be honest, i'm probably seeing more momentum in several days. we've had about 107 searches inside the board list. emily: three people chosen -- guest: we see a lot more placement outside of wordless candidates -- i claim that as
victory. it is about whether there is momentum behind us. in the last 60 days, we've seen nine female board placements from twitter to shutter stock to constant contact. say the momentum is increasing and we are seeing that reflected in our own numbers. i'm really impressed with what you are doing. there's all kinds of data that shows diversity, including gender diversity is effective in all groups. do you think ceos realize -- you have said they are looking for all kinds of diversity but clearly, women are a fundamentally different kind of person than men and really do bring fundamentally different points of view and different ways of working.
the is your assessment of process of changing the mindset of these leaders that this is a necessary step in the direction of more effectiveness? guest: i think you are asking a great question about the funnel. what is the progress all the way down that path? we do a number of board list events with ceos and founders but there's no debate about the gender to theing boardroom. we see more misconceptions about how easy it is to find talent. in the survey that we ran, only time they felthe their was enough male talent. only 50% of the time did they find enough female talent. 59% recruited through their own investor network.
what we see is they don't debate a philosophy. what a debate is whether there are enough qualified women and what networks they use to find them. david: the existence of ward list just take away their excuse. we hope never again will there be the excuse that we just cannot find it will fight woman. emily: doing and acting on it is a completely different thing. guest: one of the things we have to recognize with tech startups is something does not become a priority until the ceo decides it is a priority. ande are many competing they don't get to the board until they decide it is a priority. if a seat is empty, you need to fill it. the reality and startup boards is it is one of many things on the ceos mind. what we are battling for is mine shares.
added three new board members and it is a company obvious we in crisis for top these are three very accomplished people. why would they join a board like that? guest: some people love a challenge in some love the complexity. it's one of the reasons to join the board of a turnaround or crisis to chew asian. some are attracted to the complexity and the diversity and the size of challenge. to first time a board members as you have to think about the time commitment. when you look at who's equipped to take on the challenge, you have to look if it is right. emily: 40% of companies have a board team that is unfilled? guest: you are going to turn your attention to the order room when you have the bandwidth among dozens of other things going on.
matures, they issue that then ceo takes more time for. it is unfortunate because most series a and b boards need that in the formation years of their company. great to haveys, you on the show and great to hear the progress you are making. thank you so much for stopping by. , you will be back with me after this break. coming up, we will head to tokyo for more context behind softbank half sale of its stake in alibaba. ♪
with machine learning and natural language processing to anticipate what shoppers are after. they could help them improve as the e-commerce giant expands in china and abroad. pivotal to sites like amazon. is selling at least $7.9 billion of its shares in alibaba. the sale will strengthen their balance sheet as it reduces the ache from 32% to 28%. for more, we are joined by reed stevenson from tokyo. what is your reaction to the sale? i know most of a was anticipated but what can you tell us? one thing to remember is back in february, softbank gave us a signal that this might happen. they announced a $5 billion in shares buyback to purchase working percent of their own shares.
boostave the socket nice and the question was how are they going to pay for it. i think we have part of the answer today. anyy: does it signify change in the relationship between softbank and alibaba? takes the stake ownership from 28% to 32%, so there's not a huge change their. the two ceos sit on each other's boards. i don't think it's going to change. they like each other. i don't think you should read too much into this apart from softbank meeting to shore up its financials little bit. that: here's a company paid $20 million for their shares of alibaba 14 years ago. meanwhile, they spent $22
billion to buy sprint not too long ago, so they have been moving money around for top if you have a $30 billion again on a $20 billion investment selling eight alien dollars worth, it would probably be appealing. when you say that there's something almost overlapping in these companies at this point? their businesses are not exactly did rent. e-commerce,gth in the other owns a bunch of web related properties, but you are right. there are good buddies in asia. relationship will continue and softbank is using
toopportunity to cash out and wend its buyback will have to see how it develops from here. remember speaking to jack ma on the floor of the new york stock exchange -- do you think this signifies any change in confidence in alibaba? david: not at all. i think it is a little bit taking cash off the table. they are so amazed at the success of alibaba, they thank jack ma every day. emily: david kirkpatrick, our bloomberg contributing editor, thank you for joining us. reed stevenson, thank you for stopping by today from tokyo. now it's time to find out who is having the best day ever. today's winner is a airbnb neighbors.
nuisance for those living next door but the company announced a new feature that could get rid of disrupt the guest. it allows those living nearby to issuesdisturbances and with a common space like parking or criminal activity. anyone who notches up several complaints could be suspended from airbnb. that does it for this edition of the bloomberg west. tomorrow, do not miss the facebook mobile marketing executive on go. that's 7:30 eastern time from new york. that's all today from san francisco. ♪
him from our studios in new york city this is charlie rose. charlie rose: david brooks is here. he has been a columnist for the new york times since 2003. he is known for tackling big ideas in modern subjects. capitalism and character. he has turned his focus to the 2016 presidential campaign. i am pleased to have him back at this table.